i'm christine tan. asian markets pull back from near 13-month highs despite signs manufacturing activity is recovering. >> hello, everybody. i'm louisa bojesen. in europe, manufacturing shows signs of improvement in september as the imf raises its global forecast for 2010.

>> and i'm julia boorstin. in the u.s., it's light out for ken lewis. he's calling it quits at the end of the year. >> hello, everybody. welcome. very glad that you're with us this morning. we're here covering the markets for you and showing you all the activity that's taking place. we've had the euro zone manufacturing pmi data. 49.3 versus 49 as you can see on the screen. it is growth slowing down from very, very low levels. the euro/dollar, 1.4589, not sure that we're seeing any direct reaction to that. it seems that we're in this trading range ahead of g-7 this weekend and the nonfarm payroll data tomorrow. european markets, though, the general markets, relatively

flattish this morning. you can see we're trading higher by 0.5%. the banks, uni credit, all up somewhere in the region of 1% to 2% or so. the dollar cross rates, we continue to be focused on dollar trade these days. higher by 0.3% against the yen. we're looking at euro off a bit against sterling. another bright spanking day to get started with, christine. how are you, how is asia? >> not so bright here in asia. a couple of the markets are in negative session. let me tell you about that. despite the pick up in manufacturing activity we saw in china and korea ya, we have weak manufacturing numbers from the u.s. the nikkei 225 down 1.5%. the strong yen hurting exporters. the strong korean won starting

to impact if south korean markets. kospi lower by 1.7% and the aussie market is down 0.9%. this is how crude oil is looking. yesterday we saw gains. right now, 58 cents lower, $70.03 a barrel, trading just above the $70 mark. brent is down 47 cents, $68.60 a barrel. julia, good to see you. how are the futures looking good today? >> good to see you, too. futures look like they're pointing to a higher open on the dow. the nasdaq is pointing higher by about 20 points above fair value. nasdaq is off 4.5% above fair value. we'll have to take a closer look at what is pushing the nasdaq down. the dow is rebounding. stocks did slump yesterday before finishing the day off just 29 points in the last day of the third quarter. let's take a quick look at the bonds and how they're shaping

up. the 10-year bund yield is down to 3.24%. looking at the 10-year bonds here, yesterday short-term treasuries rose but now it's up to 3.31%. gold is holding steady above $ ,000 an ounce today after breaching that mark on wednesday on the back of the weaker dollar. it's now up 0.9% to $1,007.65. louisa, over to you. >> thank you, julia. we need to get doug into our program here at the top of the hour, douglas miles and joining us in the studio is jacob schmidt. jacob, good morning. i was speaking to somebody yesterday who was saying, if i haven't chased it yet, whatever it be in the market, equities,

certain asset classes, why should i start chasing it now? and her argument was, you know, there's no reason to change your strategy just because you've seen the market rally so much. is that the way you see things, as well? >> obviously, markets have gone up the last two quarters. so whoever has been in the market has enjoyed a big party, a nice rally. the question is, what's going to happen here, fourth quarter? i think there are a couple of reasons why we continue to be positive/bulis. and i think in general there's still a positive, bulis undertone in the markets driven by fundamental data as we saw earlier. pmi data getting slightly better. we are coming to a point where it's getting actually positive, no longer the second derivative, but the first derivative, the positive change. i think we are very close to that.

no major shock here. thirdly, everybody wants to have a nice christmas. let's worry about the expenses on the first of january. so i think there are people trying to be positive here and are positive because the markets have gone up. so if you have missed it, as a funds manager, then you're in trouble here because what are you going to do? you can stay flat here and you can hope that the market will dip and then you buy on the dip. everybody knows that. >> i guess we're coming out of a quarter where markets have done phenomenally well. double digit gains in many cases. and yet we keep hearing we're in for another correction. in my mind, i don't see where that correction would come from, what the catalyst would be. it has to be a pretty major catalyst to have people get out of the markets now. >> what are the risks here?

could be something in the midwest, could be something else. highly -- it's possible, but i think the market could digest it very quickly. so iran -- it would be digested rather quickly, we guess. secondly, macroeconomic, i don't think there's any major shock out there. everybody knows unemployment is high. everybody knows it's 10% of the workforce out of jobs. but 90% are in the shobs. thirdly, interest rates today to be very low and will be low for a long period of time. hence, the stimuli continue to be hands pop fourthly, the bottom line is better in the earnings, but the top line is not getting better. but it doesn't matter because these companies are making money. so unfortunately, it all is positive. >> it's julia here in the u.s.

some major banking news today. obviously, we have ken lewis resigning last night, jpmorgan break up this week. i'm curious what both of you think this says about the future of the mega consolidated bank. douglas, let's start with you. what do you think? >> well, we think it's been quite clear we see an increase in talk of regulation. as we potentially see write backs going into this quarter, perhaps we're over aggressive writing things off earlier in the year and the economy started to pick up. we'll get more talk about how the government bailed the bankers out and the bankers went home with big checks. there's likely to be some action as we see it in this quarter for political reasons. less than 0.5% of the people working in the world in investment banks or the dwom

developed world, so from a political sector, something must be done. hsbc has moved their ceo from london the to hong kong. it's definitely something about where they see the banking system going. >> jacob, what do you see all of these banking changes indicating? ken lewis is one of half a major dozen bankers who left his post since a years ago. >> it's obviously a further increase in political include and particularly, unfortunately, in the u.s. it is becoming more socialist, i have to say, unfortunately. so i think what that means is the fed, the treasure, they're trying to get a grip on the system and they're trying to change things. it is very clear, they want to

change something. the change will be in the financial system. ken lewis is the first one to get out and other people will follow. they want to restructure the financial industry. whether it's good or bad, i'm still not quite sure because the work is done on the second and third layer. but it's change. the change is a result of regulation and all the other talk of g-7 and g-20. >> douglas, i want to get your thoughts on asia. some of the markets that are open today are trading lower. what do you think is going on? what is driving trade here? >> yes. i think something that's very interesting, we were looking at a strong quarter. q3 was obviously phenomenal. september in particular. something i'm watching carefully is the ha shares. the chinese market has sold off,

but the hong kong listings having. china seems to be the big story, but the chinese clearly are not playing that story. they're less positive about their own market than those are outside. so i think that's something we have to watch very, very carefully. for us, for example, we prefer now looking at the export story in china. everyone is trying to clamor on to the story. we think with the renminbi flat against the u.s. dollar, that's the story for the quarter. >> would you use that same theme for countries like japan and south korea? obviously, in japan and south korea, these two currencies are hurting so much, it's hurting exporters in these two countries. >> i think that's interesting. we like japan. if you look at the valuation around the region, the japanese performance is weak. if you look at the impact of the yen, yes, people sell off exporters.

but japan has some of the highest quality manufacturing companies in the world. as we start to see the u.s. economy recovering, some of the beneficiaries of that impact will be the higher end ex porers, someone like nippon electric, for example. >> thank you both so much for joining us, jacob smith. as we've been discussing, ken lewis is resigning less than a year after celebrating the takingover of merrill lynch as the crowning achievement of his career. lewis told the board wednesday evening he will retire at the end of this year. lewis leaves as congress, new york's attorney general and others are pressuring b of a.

while the u.s. government urged management changes, reports say regulators didn't lean on lewis to step down. b of a says six internal counties are in the running for his successor. in frankfurt, b of a shares, let's pull those up, up 0.69% to $11.65. fed chairman ben bernanke says congress should create a council of regulators to monitor threats to the u.s. banking system. he will speak at 9:00 a.m. in prepared remarks, bernanke says individual regulators should be able to act on their own to ensure banks don't become so highly leveraged in the first place. president obama's plan to ov overhaul financial regulation would give the fed too much power. comcast is denying a report

that it struck a deal to buy nbc universal. therap.com says a deal was hammered out tuesday. comcast, the biggest cable 3r0ier says it doesn't normally comment on rumors, but that the reports are inaccurate. vevendi is deciding whether to sell its 20% stake in the company. in europe, ge, comcast and vivendi are trading comcast down 276%. the imf has raised its forecast for economic growth next year. the imf suggests a 1.3% expansion. after more downbeat assessments for most of this year, with it says it's now seeing an end to the global recession boosted by

strong performances in the asian economies. however, the imf says the biggest risk to the economy is if they withdraw support too soon. up by more than 11% is tandberg. the board of tandberg, which manufacturers video kornsing equipment has recommended shareholders accept this offer. speaking exclusively to cnbc, the president of cisco europe explained the acquisitioning. >> we've seen explosive growth in this and this allows us to interoperate with more end points and that's what tandberg really brings to us. >> and cisco shares trading higher by around 0.25%. the five biggest banks in britain will enforce the limits

on bonuses agreed upon at the g-20 summit last week. barclay's, hsbc, lloyd's, rbs and standard chartered have all signed up with the hope that overseas rivals will follow suit. the g-20 said a large number of bonuses should be deferred and be subject to potential clawback. >> business sentiment continued to improve from a record low hit earlier this year. the headline index came in as minus 33 for september, better than the minus 48 reading in the previous quarter. companies said funding conditions were getting easier, which could allow the boj to phase out this buying of corporate debt. however, companies say they will the continue to scale back the capital expenditure. the yen strengthened briefly ahead of the data right now trading at $90.01.

in a parade of picture-perfect troops, tanks, with thousands gathered in tiananmen square, one-party rule will still be the way to run the show in the world's third biggest economy. >> translator: we will continue to propel the peaceful development across the taiwan straits. we will continue to work hard towards our goal of a unified china. >> well, this comes amid reports that taiwan and china will find a long awaited memorandum this month, julia.

>> you can get more news, videos and blogs on all of today's market-moving activity at cnbc.com. coming up here on "worldwide exchange," the celebrations begin in bay ying as the people's republic of china turns 60. we'll analyze the country's growing role in the world economy. also, bank of america's ceo ken lewis is stepping down a couple of days after jpmorgan shakes up its management team. we'll look at the changing of the guard in the financial sector. and global markets end the quarter with luge gains, the s&p 500 rising more than 15%. will this momentum continue during october? e-mail us your thoughts.

ooh, peanuts. hello. welcome back. this is "worldwide exchange." worldwide, that means we cover the world. global equity markets roundup is next. becky is in lopped. what are you focusing on? >> it's the beginning of a new quarter everywhere. having finished the third quarter on a -- well, rounding out the quarter, very, very much stronger for the ftse 100. in fact, the biggest percentage

gain on record. over 20% higher today. we're starting a fresh quarter with more gains, just about 14 points or so, about 0.3%. on the upside, about 7% higher. in fact, there's been a bit of speculation swirling around out there. both companies declining to comment on that kind of thing, but there is obviously speculation leading to that gain on the left. that came on the back of an analyst upgrade. the analyst put morgan stanley increasing the rate in overweight. patricia, how is it going in germany? >> we're up about 0.5% at the moment. it is immune issue re, allianz and deutsche bank trading up quite nicely. deutsche bank did have a bit of a turn around. but deutsche post is quite an upgrade in its price target from one of the brokers is down about 1% as well as metro. metro suffering from the bad retail sales data we got on a macroeconomic level for the

month of august. down about 1.5% on the month, down about 2.6% on the year to year basis. adee da, great numbers yesterday after good numbers from nike. but it is still stocks that are suffering substantially. so most of them are under pressure, anywhere between 3% and 4%. tech stocks down about 0.1%. we had an ipo here from a chinese company here this morning and it's trading right now at 10 euros, slightly up. it was as high at 1087, which is actually the first ipo in a very long time out here in germany. and with that, over to stephane in france. >> and in paris today, there's an interesting session for the auto sector. we've got renault, the carmaker, trading higher. especially the top gainer of the cac 40 on the back of samsung numbers. the corian unit of renault posted some sales up 17% in september. that is driving the stock higher in paris. at the other end of the boat, we

have michelin, the tiremaker still the worst performer on the market. it is very cautious about the recovery, doesn't believe that the economic recovery is strong at this stage. prospects are not good. the economic recovery according to him is due to companies restocking. the banks today in paris are trading heeer. banks are set to meet with the french president in the next couple of hours. we've got bnp paribas up 0.5% and societe generale, the best performer in the seconder, up nearly 1%. on to singapore now with adam and the asian markets. >> thank you very much, stephane. it was a difficult day for the nikkei 225 falling to a fresh two-month low in that mark.

we had the tancan survey out today, showing business surveys improved slightly. worse still, they average forecast, the dollar/yen rated 94.50. while the yen was stronger versus the u.s. dollar today, it doesn't mean 450 basis points stronger from this particular forecast. take a look at the automakers, all of them trading to the down side with the exception of honda, the second largest in japan. the ceo of honda says their earnings could come in better than expected so long as the yen stays at these levels. there are concerns that the u.s. could bring up the issue at the world trade with japan surrounding overall equities. back to you, julia. good morning. >> thanks so much, adam. it's the busiest day for the week for the economic data. weekly jobless claims are out at

8:30 a.m. new york time, forecast to rise by 5,000 to a total of 535,000. at 8:30, we'll get august personal income and spending figures. income is expected to rise 0.1%, spending by 1.1%. at 10:00 a.m., a trio of reports will be can out. the ism manufacturing index is forecast to show a reading of 54 in september. any number above 50 who knows growth in the sector. construction spending is expected to be unchanged in august. and the national association of realtors releases august pending home sales. in addition to ben bernanke's home sales in market regulation before the house financial services committee, investors hear from two other fed officials today. both speak about the economy and both at 5:30 p.m. new york time. automakers report september sales today. analysts say without major incentives last month, such as cash for clunker webs sales

likely fell back to the three decade lows the industry saw earlier this year. that's your global stock watch. >> coming up on "worldwide exchange," we have the tancan survey in focus today. it shows japanese corporate sentiment has improved, but how long will the up trend continue? >> and also the 2010 growth forecast for the uk economy thanks to the unprecedented intervention of washington and the federal reserve. we assess the health of the global economy here on "worldwide exchange."

i'm christine tan. beijing puts on a spectacular show to mark 60 years of the founding of the republic of china. >> hello, everyone. i'm louisa bojesen. technology group accepts the $3 billion takeover offer from u.s. giant cisco. >> and i'm julia boorstin in the u.s. it's light out for ken loosis, the beleaguered bank of america ceo is calling it quits at the end of the year 37. we've got more data hitting the screens in europe. falling to 49.5 during the month of september. that's from a level of 49.7

during august. the forecast, though, was for over 50, 50 points. the forecast was for acceleration. we're still seeing a little bit of contraction. new export orders, index rising, and i do note that this, by the looks of things, is kind of the biggest area of positivity. so we're looking at positivity in the new export orders index rising to 51.5 during september from 50.2 in august, the highest since december '07. you're just looking at a sterling chart right now. cable, lower by 0.2% against the dollar. 1.5947. let's talk to tom bosa, why not, head of economics of national australian bank. what does this say to you? and especially if we look at it from a positive eyeglass, if we look at the new export orders, that's a pretty nice figure for new ex ports.

>> indeed, and they have, of course, been very pleased. we have to be lessened by domestic demand and more by exports and it seems that the weak exchange rate is beginning to feed through. i think ex ports must have been helped by the fact that the global supply chain looks to be rebuilding itself after we saw that massive contraction not only in trade, but also in stocks early in the first half of the year. the headline number looks suspiciously weak to us. it is below that 50 break even level, so it's a contraction in output. however, there are conversations with manufacturers in the uk would suggest that output is stronger. maybe we'll see a bounce back in october. >> tom, stay with us for the time being. i want to show viewers what's going on our markets, the global index, flat to just a little bit lighter at the moment. 4316, so we've taken a couple of points off. the european bourses, similar

story. we're holding us to a flat to positive note. we're seeing buying in some of the bigger banks. we're seeing buying in some of the commodity relate stocks out there. it's the beginning of a new quarter. but currency markets, we just showed you a chart of cable a second ago. the dollar/yen story, continuing to see quite a moment. 0.3% to the upside. although it is ahead of the nonfarm payroll data tomorrow and g-7 over the weekend. chris fifteen, how about asian markets? what's going on there? >> a couple of markets are closed today, bearing in mind a public holiday. trade in china is thin. we're seeing a negative session overall because we had that weaker u.s. jobs and manufacturing number and that is putting pressure on here. the nikkei 225 is down 1.5%. the strong yen really hitting exporters there. the kospi and south korea getting hammered by the strong

won. the sensex is marginally up, 0.3% and the straights times in singapore, down 0.5%. overall, a pretty bleak picture. julia. >> thanks so much, christine. we're having a bit of a reversal from where we were earlier this morning. dow futures are down a hair from fair value. nasdaq is down about 4 points from fair value and the s&p 500 also off just a hair. so there does seem to be involvement there and we could see that change before the market is open. let's take a quick look at the 10-year yield, 3.31%. let's discuss more of the

global economy. tom, good to have you back with us again. whether it's a slight improvement in business conditions or manufacturing in china and india, a big improvement there. things seem to be looking positive for the overall economies here in asia. do you think this region will be the first to come out of the global recovery some of. >> yes, we do. if we look at taiwan and korea, we're seeing good output there. even in japan when we start annualizing the industrial growth, it is beginning to get roaring back as the global supply chain rebuilds itself. i think there's a bit of overpessimism on that tancan survey. >> tom, it's julia here in the u.s. if you think asia is going to be beating the global economy out of recovery, where does the u.s. fit into this? we have a lot of data points due out today and there will be a

lot of attention on that jobless number for september due out tomorrow. what's your perspective on the u.s. economy, especially the role that unemployment will play? >> what we have here is a policy where the policy stimulus has worked. if you spend enough public sector money, you will get a short lift expansion. we think the payrolls numbers will continue to ease off. maybe gnome tomorrow we'll get a reading below 175,000 which will be certainly the best performance since august 2008. again, the policy stimulus is working. the question we have is what happens in 2010 as it starts to ease out. it's fairly easy at the moment to stop. the pace of layoffs is slowing. but next year, unless we see a stimulus, we'll get a jobless recovery as 2010 comes in and stimulus is removed. >> tom, hi. are we still looking at a

two-pronged recovery? >> i think we are. the g-20 meeting on the weekend talked about the need for rebalancing which essentially meets higher domestic demand in europe, china, weaker domestic command in the states. we should be perhaps exporting more and importing less. the problem we have, we have fairly significant deflation in japan, but in germany and france and that will weigh on people's ability to consume and it means rebalancing is still way off. it will take us several years to get there. >> tom, thank you very much for your views. always good to talk to you. let's move on to talk about another country today, marking the 60th anniversary of the communist people's remember of china. thousands of people gathered in tiananmen square today to celebrate the milestone which included a recession of military and 60 floats and over 2,000 people. the spec tack showed off the

country's nuclear missile capabilities. china looks at the years ahead for china. >> reporter: it's been 60 years since it was declared that the chinese people have risen. but it's only been in the last decade that china has begun to take its stage on the inter national stage. it was only since reformed that china began to catch up with the rest of the world. these days, though, china is a member of every world body, plays a crucial role in politics and runs almost like an average free market. almost, but not quite. >> my estimate is where i say at the beginning of this year, the private sector probably accounted for about 70% of gdp. but on the other hand, we've seen in the government's response to the session, that they still control a lot. they completely control the financial system and they control all of the most capital intensive industrial companies which means they control about 40% investment in chinese

cities. >> reporter: managing a population in a country whose borders run from india to russia is no mean feat. china faces many issues in the coming decade. in an effort to improve the lives of the peasant population, beijing set a policy framework allowing farmers to lease their land rights issue. china made it easier for the rural population to obtain goods. curbing corruption is also a crucial part of keeping the rural areas peaceful. after dozens of riots against injustice and abuse of power. as the economy continues its rapid growth, beijing has realized that it needs sustainable development. recently pledging at the u.n. climate change summit to cut emissions and develop renewable energy. >> translator: out of a sense of responsibility to its own people

and the people across the world, china has taken and will continue to take determined and practical steps to tackle this challenge. china has adopted and is implementing its national climate change program. >> unlike the past, where china put development ahead of the environment in its haste to catch up with the rest of the world, beijing has shown that it is now more concerned about sustainability. and as china takes its place beside the big boys, so to speak, other countries are expecting it to start pulling its own weight, namely to stop being so reliant on foreign capital, whether in the form of direct ex ports and to start contribute to a more balanced global economy. >> what really drives that process is the number of people who join the middle classes every year. once you get this exponential growth in the middle class, you get a consumer society and that

consumer society lives on credit. consumer credit is now 3% of gdp. it's basically an infant. >> but it's not just domestic consumption. china wants to develop its services sector, as well. the global financial crisis has helped put china on a more even development keel with the rest of the world. from here on, it will be interesting to see how china's demand style capitalism will fare versus western democracies over the next 60 years. cheng lei in shanghai for cnbc. let's talk about india right now. ayesha faridi joins us live from mumbai for the india business report. hello, ayesha. >> hi. thanks for that, christine. after conquering 17,000 in yesterday's trade, it chooses to consolidate today. tomorrow is a holiday for india. you have this bit of adjustment coming in. just about a marginal gain is

what you're seeing for the nifty. 17,150 plus for the sensex and quiet for the broader markets, as well. your big star in today's trading session is indecember bharti. mt has said in their press release that the deal was not possible with the existing framework. a dual listing is what they were looking at and that indeed hasn't happened. the talks were mutually dominate and had so is what we picked up. they have decided to disengage stocks. guess how brokerages are viewing this particular bit of news? citigroup has maintained a party. the stock has been underperforming for the past couple of trading sessions. a neutral rating coming in from nomura and from jpmorgan, as well. so bharti is your big winner in

the trading session today. the other stocks in focus are banking, cement and autos are holding up quite well on their monthly numbers. with that, it's back to you. >> ayesha, thank you very much for that, live from mumbai. >> let's talk about japan right now. the country's top government spokesman says the tankan shows less pessimism. let's get some analysis from naomi fink. naomi, a slight improvement in business conditions. how concerned are you about the counsel ward revision in capital spending? >> the downward revision shows that firms are still not really looking to capture year ago levels within the financial year. that's not really a surprise.

if we look at the breakdown of capital expenditure, it's manufacturers that remain the weakest year on year, while nonmanufacturers have versus 2008 scaled back the cuts in their expenditures. perhaps part of the problem is that domestic demand is not proving strong enough to offset the demand -- the decline in overseas demand and that's something else that we saw in the supply and demand conditions subindicator in the tankan. >> so the corporate sector seems reluctant to drive for recovery. we also have the drive and stimulus measures. where does all this leave the japanese economy? >> well, the fact that nonmanufacturing sentiment within the tankan improved much more than expected is a hopeful signal. nonmanufacturing is largely the services sector is largely

domestic and services sector provide employment for about 70% of the nonagricultural labor force. so if they can deliver on that improvement and sentiment, well, if they can continue with the improvement in sentiment and continue improving cap x and finally start hiring again and raising wages, that could be positive. but that's a very far point from where we are now where things are not getting worse. i mean, they're rebounding, but they're not improving. it's not optimism we see. it's curtailed pessimism. >> naomi, hi. it's louisa bojesen in london. corporate bonds, for example, they're offering certain types of loans. if they let these programs go, as many of them are set to expire here in december, would that make a huge difference?

they can still hold on to their monetary policy. >> it's debatable as to how much the corporate bond buying program has actually helped japanese sentiment. perhaps it was actually the rebound in overseas demand that was the stronger motivator. the commercial paper operation, however, is arguably important simply because commercial paper is an important conduit of liquidity downstream. a lot of soft credit is extended from large companies and i think ability to issue commercial paper is a large dependency on how long those soft credit lines last. so what we've seen in the commercial pairm paper market is a recovery from the post lehman lows, but year on year, it's still in negative territory. so i would think that the boj would look at intercompany credit and see whether it's improving to determine whether

they have to extend their commercial paper operation or not. again, we're going in a positive direction with nonmanufacturing sentiment improving. small to medium sized business sentiment, the weaker than large businesses is improving, but the money multiplier still probably has a bit further to go before the boj determines that we're in a positive cycle again. so i don't think we can discount an extension in the cp operation just yet. >> naomi, a quick question from julia in the u.s. how do you think the strong yen could have a potential impact on the yen and what is the government prepared to do about the impact of the strong yen? >> the strong yen matters most when everything else is very predictable. so, for example, in the last recovery that we saw in 2002, 2003, the u.s. was driving demand, with ex ports were the only thing growing and the

financial sector was finally, finally recovering from its own crisis. that's very different from the situation right now. domestic demand is not so unstable. external demand is unstable. in that context, the strong yen is much less important. what is important now is whether overseas demand is going to recover and if not, whether domestic demand can pick up the difference. if domestic demand does, well, the yen becomes domestically less important again. while it's one contributing factor, i think there's a little too much emphasis placed on the yen's strength and its detriment on the japanese economy. >> naomi, thank you so much for your views. thank you for talking to us. >> from asia to the middle east, let's head out to dubai for an update on the middle east markets with nadine hower. hi, nadine. hi, louisa. since the end of ramadan, some

days we've seen profit booking, which is only natural, but the overall pattern has been positive. the dmf index has been able to maintain trading above the 2,100 support level which has been very important. one positive sign that we are seeing is foreign investors showing increasing interest in the equity. that could be some of the most undervalued in the region. in fact, a recent report on investor confidence that came out of recent investment banks to our capital stated that the exchange equities at the adx are the most undervalued in the entire region. moving away from markets on a mook row level, recent bank of america merrill lynch global research indicates that the economies are expected to recover in 2010 which is not a surprise. what they are predicting is 3% gdp growth for the combined gcc

economies. of course, several factors coming into play. first you're going to have a global economic recovery just in general as a whole. also, you're going to see a recovery in capital markets and last but not least, the price of oil increase which is very important for this oil exporting and reducing region. so the budget heavily relies on oil revenues. that's it for me. back to you. >> nadine hawa, thank you very much. britain's serious offers is saying they're going to release a statement on bribery allegations this morning. it's a big case that's rolling on. coming up, we have eu employment data coming in in around ten minutes. will it show signs of stabilize? >> plus, the dollar gets a boost after disappointing manufacturing data in the uk. we'll have a look at the currency markets come up next. q

ooh, peanuts. welcome back. you are watching "worldwide exchange." a brief snapshot showing you where we are on our dollar cross rates. the dollar/yen, activity to the upside. cable lower by 0.3%. euro/dollar seeing a bit of

weakness. let's jump into it. ian, it seems that we are seeing this shift out of the dollar in general. it's motd rated a bit since yesterday, but chasing these high yielders. >> yes. i think overall, the trends in the currency markets you've seen over the course of recent months are probably going to extend into the end of the year. so that does mean we're likely to see euro/dollar continuing to move higher. the commodity currencies likely to remain well supported over the next few months. but in the very near term, we are likely to see more volatility, particularly given the extent of the moves we've seen. so we can't rule out a correction in the near term. so for euro/dollar, i wouldn't be sproois surprised if we start to see a corrective pullback over the next couple of days. obviously, the data from germany this morning was on the disappointing side and also we have the g-7 looking as though they're going to put currencies

back on to the agenda. we've seen several comments coming from politicians over the past couple of days, as well, suggesting maybe as euro/dollar approaches the 150 areas, that could start to become a bit of a problem for european politicians. so they may well start to get a little bit more vocal, but i think as far as the g-7 is concerned, when it comes to talking about currencies and rebalancing, it's going to be probably not the right forum. as we know, g-20 is probably the forum now for those kinds of discussions giving that the rebalancing has to take place probably between the u.s. and asia rather than between the u.s. and europe. >> ian, what's your perspective on the role that the dollar is going to be playing in the global economy moving forward? there's been lots of talk over the past week that the dollar is the yuan, whether the dollar will be continued to be viewed

as a funding currency. where do you view the dollar? >> as far as the dollar is concerned, it will obviously remain the major trading currency and as far as the u.s. authorities are concerned, they will be extremely anxious to make sure that they maintain stable foreign investments. so i think it will come down to the pace of moves in the fx markets rather than the actual leve levels. and while in the current environment, most companies will be happy with a gradually depreciating currency. in the u.s., i think they will be conscious of the fact they needed to attract my support of foreign investors, namely the chinese.

namely, the chinese have cautioned the u.s. before about maintaining the value of the u.s. assets, so that will be an important factor going forward. so i think as far as the dollar is concerned, as long as we continue to see a gradual weakening, it shouldn't be too much of a concern. but if that decline starts to pick up pace, then i would expect to see some action coming from the g-20. >> ian, thank you very much. we appreciate your time,ee ian standard, current strategist from pnb paribas. coming up on "worldwide exchange," britain's five biggest banks by world leaders at the g-20 summit in pittsburgh just this past week. will this set an example, though, for the rest of the world? >> plus, ken lewis is stepping down from bank of america at the end of the year. is this the start of a new era for global banks? we'll bring you the analysis. stay tuned.

iemp christine tan. the nikkei is at a two-month closing low. >>. >> hello, everybody. i'm louisa bojesen. the imf raises its global forecast for 2010. >> and i'm julia boorstin.

in the u.s., it's light outs for ken lewis. the beleaguered bank of america ceo is calling it quits for the end of the year. >> hello, everyone. welcome back. you are watching "worldwide exchange." we're just sitting tight waiting for the unemployment data to hit our screens for the euro zone. of course, we saw the german unemployment data yesterday showing a surprise drop as opposed to a gain. here we are looking at the eu jobless rates at 9.6% versus the forecasted 9.6%. so bang in line with expectations, 9.5% is what we were looking at previously. other than that, i think it's worse just highlighting some of the details that we're seeing on the actual time scale. the unemployment rate is the highest since we've seen in march of 1999.

so 9.6% versus 9.5% during july. but in line with expectations. our markets, though, flattish at the moment. we were called relatively flattish initially, just coming off a bit by 0.3%. actually, trading slightly lower on the back of perhaps unemployment data, perhaps a little bit of repositioning in the markets following the earlier data that we had out of the uk. let's take a look at what we're looking at on the incidentsies themselves. here we've seen markets turning lower. so we've gone from a slightly positive market story to a little bit of negativity just creeping in. dollar cross rates briefly glancing at them with cable now lower by small 0.1%. the dollar holding up gains against the yen. julia, in the u.s., what type of a session are we moving towards? >> well, we are going to take a look at the futures right now and see how the markets are trading. we have to remember that the third quarter, which finished yesterday, the dow had its best quarter since 1998.

now it looks like we could see a little bit of profit taking as the market futures are heading lower. the dow is off by about 24 points from fair value. nasdaq is down by nearly 9 from fair value. s&p 500 pointing to a lower open. we have a lot of information for the markets to digest today. manufacturing data, personal income and spending. pending home sales, construction spending. this could be a long list and we'll see how the market deals with that data. the 10-year bund yield is up 0.007 to 3.25%. and the yield on the 10-year note is up 0.006%, moving higher to 3.31%. christine, what is it looking like in asia? >> well, julia, mostly negative session here in asia. lots of concerns about the state of the global recovery about that state of the negative picture in manufacturing. it's putting pressure on the markets. nikkei 225 down 1.5%. we had tankan survey showing

business conditions improving a little bit, but large businesses are cutting capital expenditure there. the korean won stronger, as well. that's hurting the exporters in south korea. the aussie market is down 0.9% and the sensex in india trading just off 0.06%. so overall, a negative session here in asia. in terms of crude, this is how the picture is looking. seeing a pullback as far as nymex light sweet crude is concerned. down 80 cents. $69.80 a barrel. brent is trading lower, 73 cents, $68.34 a barrel. julia. >> thanks so much, christine. big news here in the u.s. today. bank of america's ceo ken lewis is resigning less than a year after celebrating the takeover of merrill lynch as the crowning achievement of his career. lewis, who spent 40 years with the company told the board wednesday evening he will retire at the end of this year. lewis leaves as congress, new

york's attorney general and investors are pressuring b of a for nos disclosing losses to shareholders. the u.s. government urges changes, but reports say regulators didn't lean on lewis to step down. b of a says six internal candidates are in the running including sally krawcheck. in frankfurt, b of a shares are now trading up to $11.74. joining us now is lothar mental. lothar, thank you so much for joining us. lots of big news in the banking sector. obviously, this week has been packed. we have this news about ken lewis. there's been a jpmorgan management shake-up. in europe, we have the uk's five biggest banks agreeing to bonus curbs. what's your sense of the future of the banking industry? should we see this as a sign that these mega banks are no longer going to be, you know, remain as status quo?

>> i think we certainly see that there is a lot of work to do and it's good to see that there are signs of activity. i was very frustrated earlier on in the year when there didn't seem to be much impact at all from the crisis that we just had and everything seemed to continue just as was. so seeing a bit of change, seeing a bit of activity and also in the broader before he press reading a lot about the problems that are still unsolved is a good sign, to my mind. >> so what kind of regulation do you expect to see? and how do you think that will affect the banks in these financial stocks functionality and their earnings? >> well, what i expect is a mix of sort of populist -- more populist movement around banker bonuses and i'm hoping to also see some more sensible regulation around how banks actually operate, how do they finance their balance sheets, what missed balances can they run? it, to my mind, isn't so much

about how much equity they really have. it's more what risks are they running on their balance sheets. i think overall, we will see a decline of the profitability of the big banks as we've seen them in the last decade. but not an absolutely major shift. >> lothar, this is christine here in asia. can we put aside banks for a moment and look at corporate earnings. we are at the start of the q4. will we finally see top line growth coming in? >> i would expect so. i think at the moment, the markets are expecting it to be more or less a nonevent and whenever markets are expected to be a nonevent, you know what it can easily surprise and i think there is the potential for a surprise on the upside, given that companies are now very lean and mean after all this cost cutting that they've done in the first two quarters. so any increase in top line sales immediately gives them a big profitability boost. so this could be interesting. >> so what you're saying is we

could be in for a positive surprise from the companies, however, that is obviously why you're trimming your equity overweight position, then? it doesn't really make sense. >> it makes sense until we get there. at the moment, we think the markets have priced in where we should be. i'm not in the camp of those that are saying it has rallied too much because actually it fell a heck of a lot beforehand. just until these earnings come through, i am -- you know, i want to see what's coming through, because the market is very jittery and there's a lot of, in a way, gearing through the company results. as much as it can surprise on the upside, if there is any disappointment, it can disappointment on the downside. at the moment, we're in one of those situations where it can go a different way. i'd rather be neutral until i get a bit more clear view there. >> lothar, thank you for joining us. i know you'll be sticking around for the rest of the hour. we have to leave it here for now.

still to come, the u.s. and five other world powers are gearing up for talking with iranian diplomates on its nuclear ambitions today with tehran unlikely to suspend uranium enrimpment. more than just money moving across markets. it's about exchanging ideas across cultures, opening up to the world- continuing to innovate. you need to have a nimble organization that can innovate rapidly and constantly is willing to learn. speed has become so important. every aspect of business has to be able to demonstrate flexibility and agility. collaboration is the name of the game. we have at least half a dozen relationships giving us new products, new opportunities and wonderful new therapies. a great place to be is at the intersection of content and technology

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hi. welcome back. you are watching "worldwide exchange." iran will, today, face 6 world powers for nuclear talks in geneva. diplomates from the u.s., britain, germany, russia and china are meeting with japan's nuclear negotiator in an attempt to engage iran and end a standoff on its nuclear program. iran has so far refused to end its nuclear activities. as western powers feared, the islamic republic is developing weapons. >> right now we're focused on trying to make diplomacy work and we'll see if the iranians are prepared to start a process that will lead to them reintegrating into the international or whether they choose isolation. they have a choice to make here. >> let's talk more about this with elahey. you say in your notes, you don't anticipate a whole lot of

concrete measures to come out of today's meeting. what are the risks or chance that iran could withdrawal from the nuclear proliferation treaty? >> it is substantial because iranian parliament yesterday warned that it is following up negotiations very closely and if there is sanctions or military attack, they would consider any measure to limit iaa access to iranian facilities. they haven't mentioned withdraw yet. but it is a stretch from iran's side. it is unlikely that they withdraw from mpt if further sanctions are imposed. but if there is a strong community action, that is what we should expect to follow. but on the other hand, president ahmadinejad said asked for a meeting between the heads of

state, president president obama and him and instead of just at lower level. because as you read in my notes, jalii, representing iran in jen neef va, with he doesn't have any powers and any decision must come back to tehran for further negotiations. >> sure. >> i sometimes wonder with iran, if it's more a matter of national pride or just perhaps a deviation from some of the economic problems that iran is faced internally and, therefore, you know, how serious are they, really, about upsetting the entire world? or are they just using this as an internal focus point in order to get people to rally behind the president. >> i believe personally that iran's insistence to have access to full nuclear fuel cycle and enrichment especially is an insurance policy. apart from having access to the

nuclear energy and fuel in case of a crisis, in case of further sanctions in the future. but if there is an insurance policy against any breakdown, or if -- because iran's surrounded by nuclear powers, india, pakistan, israeli, united states, russia, they all have nuclear weapons. iran doesn't want to go nuclear in the sense of having a nuclear weapon immediately, but wants to establish a basic infrastructure in order to proceed to have nuclear weapons in future. and i must say that iran would be in the category of another 80 -- also countries who have this sort of option according to the secretary general. iran is not unique in this sense.

>> elahe, it's julia here in the u.s. when you look at the point of contention and what you expect to happen in terms of the potential for further sanctions, what do you think is going to happen in terms of oil and gas prices? >> if further military sanctions are designed against iran, definitely the price of oil is going to go up because we would have the same situation as during president obama's administration than the price of oil constantly going up. and whenever there was a little bit stretch of military sanction, the price would go up. the reason is that it depends on iranian oil. the market would -- it would harm the market if there is a breakdown of sort of oil exporter and on iran's part. those have been the main reasons why united nations security

council solution haven't mentioned oil at all in relation to iran's sanctions. the sanctions have been imposed on iran's imports of missile technology, nuclear related new technologies, but no mention of oil has been mentioned because they very well know that if there is a mention of restrictions on oil or sanctions against iran or oil, it is the wor west which will suffer most of all. >> thank you so much for that. we will continue to tackle this subject. meanwhile, fed chairman ben bernanke says congress should create a council of regulators to monitor threats to the u.s. financial system. better manky testifies before the house financial services committee at 9:00 a.m. new york time on financial regulatory

reform. in prepared remarks, bernanke says financial regulators should be able to act on their own. bernanke's comments could address some lawmakers fears that president obama's plan to overall financial regulations would give the fed too much power. >> yesterday we heard about bad loans. today, the international monetary fund has raised its forecast for global economic growth next year. the imf is projecting 3.1% expansion after more downbeat assessments for most of this year. it says it's now seeing an end to the global recession boosted by strong performances in the asian economies. however, the imf has warned that the biggest risk to the recovery is if governments withdraw stimulus too soon. christine. >> well, louisa, china's biggest appliance brand, haier says it

wants to expand services. it is eyeing building its business in japan. haier's asia pacific president changes the way japanese consumers shop. >> japanese are starting to look for value as much as they're looking at brand name. what i mean by value is if you put that together and you offer that as a package, with as a value proposition to japanese consumers, increasingly, they're willing to give it a try now, whereas five, ten years ago, it would still default normally to the japanese well known brand. >> you can catch the full interview and that will air on tomorrow's "squawk box" asia. still to come, ken lewis is leaving bank of america a couple

of days after jpmorgan reshuffled its management team. are we moving into a new era for the banking sector? we'll take a look later on in the show. you know what? we would love to hear from you if you have a question for our guest host. e-mail us, worldwide@cnbc.com. i'm robert shapiro. over a million people

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hey, welcome back. you are still watching "worldwide exchange." markets having turned a little bit more negative here within the past 20 minutes or so. rebecca meehan is joining us to talk about london. a little bit of negativity creeping in there. >> b of a is one of the biggest decliners, as a matter of fact. overall, it's down just about nine points or so. as i mentioned, bae is one of the biggest decliners. it's one of the global defense companies listed here in the uk. the story to watch today, british prosecutors have said that they will release a statement mid morning, so any time now, with the results of a probe into allegations of corruption and bribery at bae systems. ahead of that, we are watching the stocks ticking lower for bae systems to the tune of about 2.8%. on the other side, lonmin,

fresnillo, among the biggest decliners on the uk market, as well. icap this morning saying it reckons first half profit will be slightly lower than it was at this time last year. patricia, how is it looking in frankfurt? >> a little bit more positive. at the moment, the dax at 5,676. so the gainers still in the more defensive side. munich re still holding up about 3.5%. s.a.p. among the the gainers. metro, on the other hand, down about 1.8% of the really disappointing retail sales figures for the month of august. basf at the moment, a little bit under pressure. but the big losers out here at the moment are not only sold out stocks in the entire industry and the tech stocks. tech stocks down about 0.6%.

q sales down about 3%. phoenix down 2.7%. there is no real reprieve. if nothing else, life is going to get harder under the new government out here in germany. over to stephane. >> in paris, patricia, we are now more negative on the cac 40. the banks said a few minutes ago that the outlook for the second half of the year on the french retail banking seems more positive. societe generale believes that the cost savings this year will increase its operating profit by 430 million euros. all the banks, despite the statement, are more negative except for bnp paribas trading higher. the french banks today are meeting with the french president nicholas sar kwoe cozy to discuss the outcome of the g-20 meeting to see how measures will be implemented in the country. also trading lower, michelin, the tiremaker, the cfo of the company said that the outlook

remains extremely gloomy. he doesn't see any improvement despite the early signs of economic recovery. the stock is still the worst performer on the cac. now, over to adam in singapore for a quick view on the asian markets. >> thank you, stephane. it wasn't a pretty picture in north asia. the nikkei 225 cracking through the key 10,000 level there whooit while the tankan report indicates on face value that things may be ready for improvement. but when you delve deeper, they're revising downward to capital spending for the rest of the year. also forecasting down at 950, so the order stocks, most of the ex poerts, as you can imagine, were trading to the down side. honda paring to those losses. honda managed to close fat. the chipmakers very, very weak. al peat ya memory spinging to a

second quarter low. and finally, the financials stocks in japan were weighing down on the indexes here. there is a proefd debt relief would see the government shouldering interest costs for around three years. that was certainly unwelcome news for the financials. the market is very, very weak as we kick off the fourth day of trade. on that note, it's back to you, julia. >> thanks so much, adam. it's the busiest week for a lot of economic data. weekly jobless claims are out at 8:30 new york time. they're forecast to rise by 5,000 to a total of 535,000. at 8:30, we'll get august personal income and spending figures. then at 10:00 a.m., the trio of reports will be out, the ism

manufacturing index forecast is show a reading of 54 in september. any number above 50 denotes growth in the sector. construction spend sg expected to be unchanged in august and the national association of realtors releases august pending home sales. in addition to ben bernanke's testimony before the house financial services committee, investors will hear from two other fed officials today. cleveland fed president sandra pianalto and atlanta fed president dennis lockhart both speak about the economy and both at 5:30 p.m. new york time. also today, automakers report september auto sales. that's your global stock watch. coming up next, japan business confidence urges higher in september as the country crawls out of recession. we'll get the latest from tokyo. >> and also the be leagued boss of bank of america ken lewis agrees to step down at the end

of the year. who are the contenders for his job? we'll have analysis, just after this.

welcome back to "worldwide exchange." it's 30 minutes past the hour. here are some of the top business stories from around the world. in the u.s., it's light out for ken lewis. the beleaguered bank of america ceo is calling it quits at the end of the year. >> hello, everybody. i'm louisa bojesen. nor weekan technology group accepts the $3 billion takeover offer from cisco. >> and i'm christine tan. asian markets pull back for mere 13-month highs despite the signs the manufacturing activity is recovering. >> let's take a look at how u.s. futures are trading in this first day of the fourth quarter. the dow is looking like it's going to open down. futures are pointing down by about 23 points in fair value. nasdaq off by 7 points from fair value and the s&p 500 off by about 3.5 points from fair value. so it looks like we're heading

to a lower open. looks like there has been quite a bit of movement on those futures. taking a quick look at the yields on the 10-year bond, the yield is up to 3.31%. hue wees sa, how is it looking in europe? >> we've seeing a bit of a dip coming from the banks in particular. outperforming the insurers, outperforming the general market in regards to where we're seeing it now. the cac 40 off by almost 0.5%. the ftse 100 a little lower, a lot of focus on bae systems with a serious fraud office now stepping up its measures against the company on fraud allegations or bribery allegations. the dollar cross rates, we've been looking at these earlier in the program. this is a reminder of what we're seeing at the moment. flat trade for cable and euro/dollar lower by 0.5%. christine. >> louisa, this is how the picture is looking for asian equities. a negative session given what we saw, weak numbers coming out

from u.s. jobs and manufacturing in the u.s. nikkei 225 is under pressure. the strong yen is really hurting the exporters in this particular market. we had that tankan survey, which showed a slight pick up in business. so a little caution there. the kospi is down 1.7%, the south korean won hammering exporters there. the aussie market down 0.9%. the sensex index trading up 0.2% and the straights times in singapore ending in the red, 0.6% lower. the markets ending mostly lower. this is how the picture is looking for oil. nymex light sweet crude seeing a pull back, $70.16 a barrel. and brent also pulling back on concerns of the demand outlook after the rise in crude stocks we saw. 36 cents lower, $68.71 a barrel. julia. >> thanks so much, christine. here we're watching the news

that bank of america's ceo ken lewis is resigning less than a year after celebrating the takeover of merrill lynch as a crowning achievement of his career. lewis told the board he will retire at the end of this year. and investors are pressuring b of air for not disclosing losses to shareholders. while the u.s. government urged management changes, reports say regulators didn't lean on lewis to step down. no successor has been named, but b of a says six external candidates are in the running including tom montag and sally krawcheck. in frankfurt, b of a shares are trading up 1.5%. joining us now for market strategy, lothar mental and hue johnson. let's start off with you, hugh. this news about ken lewis

stepping down comes on the heels of the jpmorgan management shake-up and then we also have the news of the uk's five biggest banks announcing some bonus curves. what do you see as the future being for the financial sector and for these mega banks? >> well, we're going to find a lot about the future of the financial services and the regulation of the financial services business today from chairman bernanke. it's really hard to see, but quite obviously, we're going to have increased regulation. the question is was going to be the structure of that regulation. in other words, who is going to be in charge? is it the s.e.c., the fdic, the federal reserve, the treasury department or is it going to become some consortium of them all? and the real question is who will they answer to? it's going to be much tougher. there's a lot more transparency.

it's going to be tougher to operate with what we've seen in 2004 and 2007. >> lothar, you were indicating that we need to get back to the basis with regard to how we look at the bank's balance sheets. >> yes. while i'm not running a bank myself and i couldn't saig say i'm an absolute banking expect, 20 years ago when i went to uni, we focused on missed matches between the assets and liabilities. and i think, you know, it's all interesting talk about bonuses and equity ratios and all these things. but they actually need to be driven by the risk that comes from the balance sheet. >> hugh, the risk coming from the balance sheet, lothar is bricking up this as something we need to refof on. isn't that what the banking system is trying to do once and for all, clear out the products

we don't understand and get back to the basics? >> well, there's no question they're trying to do that. but let's not forget what we've built up on the asset side of the balance sheet of banks. it's not just that we've bought treasuries and done the normal things, but it's the number of derivative products and then it's the off balance sheet assets that are being held. first of all, there's a lot of them. secondly, they're extraordinarily complex products. it's hard to value them, particularly hard to value them when there are very few people willing to step up to the plate and buy them. so it's absolutely right that we have to look at balance sheets. but looking at those bank balance sheets has become so difficult and that's why we need such tougher regulation to provide the transparency so that we know what banks are doing. we know banks and investment banks are doing. what are the products that they're actually offering to the public? what really are they all about?

>> and hugh, this is christine here in asia. we know what banks are offering. what about the retail banks? i mean, a lot of people are staying unemployment is creeping up, we could see more loan losses seen by banks. do you agree with that outlook? are you as pessimistic? >> unfortunately, i agree with that outlook. i'm a board member of a number of banks and i can tell you that it's not shocking, i wouldn't say shocking. we would expect it. but the number of loan losses are creeping up and there's no question that there's a lot of sort of small retail banks start to go back away from their lending open investigation. so they're still in the u.s. i mean, i can build the case for a recovery, but it's not easy when it comes to taking a look at banks and their reluctant to make loans. in other words, we're seeing a slow down in bank lending generally. that's largely the larger

financial institutions, but even the retail banks, given the loan losses that they have, are very reluctant to make loans. they're not stepping up to the plate. very tough to get a recovery under these conditions. >> we're waiting to see whether there will be a lot of attention on top line growth. what do you expect to see? >> boy, i've got my fingers crossed on this one. there's 25% year over year decline in earnings growth. i think it's going to be less than that. we'll be encouraged by the earnings numbers we see. but you're absolutely right in pointing to the sales numbers. that's really the key. if we've got a recovery going in the third quarter, and i think we had some recovery, particularly driven by the cash for clunkers program, but if we had some recovery, it has to show up in those sales numbers. i don't know what they're going to be, but i've got any fingers crossed that we're going to see positive year over year sales

growth as well as earnings numbers that come in better than expected. this is going to be extremely important because this earnings season is going to set the tone for the markets in the fourth quarter. everybody thinks a correction is coming. >> hugh, plenty more to talk to you about. please stay with us. and wilhelm, see you again later in the show. let's cross live to tokyo and check in on the trading day there with ken moriyasu. moriyasu-san. >> hi, christine. despite the tankan survey showing big companies improving for a second straight quarter, concerns for the yen pushed down the nikkei 225 pushing down to a two-month low. one reason for the big sell-off was the fact that the tenkan

survey showed most manufacturers had assumed the break even rate to be the 94 yen rate rather than the 90 rate of today. the finance minister appeared on television this morning and reiterated granting a moratorium on reloan payments. in the cars sector, car sales rose 3.5% year on year in september marking the second straight month of increase. finally, times are tough, even for mickey mouse. oriental land operates tokyo disneyland and they said today that the number of paying customers to the two parks totaled 12.3 million in the past six months, down 6% from the previous year. tdo had enjoyed its largest ever first half last year, due to its 25th anniversary. that was the nikkei business report for today. back to you. >> moriyasu-san, thank you very

much for that. ken moriyasu, from the nikkei. julia. before that, here is a quick look at how u.s. futures are shaping up.

welcome back to cnbc's

"worldwide exchange." i'm julia boorstin. here are some of the top stories we're watching from around the world. general motors is shutting down sat around after a deal to penske motor group collapsed. those talks fell apart and gm will now close its 350 saturn dealerships over the next year, a move that could result in the loss of 13,000 jobs. gm created saturn in 1983 to compete with japanese automakers on quality and service. shares of penske fell 7% on after hours trading. comcast is denying a website that reported its struck a deal to buy nbc universal for $30 million. therap.com says comcast and ge had hammered out a deal tuesday. comcast says it doesn't normally comment on m&a rumors and that the report is, quote,

inaccurate. there has been plenty of speculation that ge has been considering its options at partner viven did i has been deciding whether to sell its 20% stake in the company. ge is down just a hair. comcast is down about 2.5%. vivendi is up about 1%. >> indonesia somatra has been hit by another quake this morning. this is the second quake in as many days to hit indonesia and tremors have been felt as far as in singapore and malaysia. thousands may have died in the first quake that struck the city of padong and many remain buried in toppled buildings. that quake measured 7.6 in magnitude. we need to get to our final thought from our guest host, lothar. thoughts that you would leave our viewers with as we head towards the weekend of g-7, the

nonfarm payroll data tomorrow. >> i would take it a bit careful at the moment, not be overly bulis, perhaps look more at the defenses rather than the cyclicals and perhaps start searching for some good opportunities in the small cap camp, as well, because if you dig a bit deeper, you will find a lot of companies that are still offering very attractive valuations there. >> i was speaking to someone yesterday, though, saying that the values where the big caps are, the values are where they haven't seen the same instances. >> well, that was certainly in the cyclicals. but what we are seeing -- and we look a lot at small caps and part of investment is that if you really do your research and thinly research, the momentum hasn't actually brought up a lot of these smaller companies. >> lothar, thank you very much. have a lovely weekend when it comes around, lovely rest of your day, chief investment

officers from octopus investment. u.s. "squawk box" follows "worldwide exchange." michelle, you're back! >> hey, louisa. so good to see you. coming up here on "squawk box," a year after t.a.r.p. was set up to bail out the nation's banks, one of the biggest players in the financial industry is leaving the game. we are, of course, talking about bank of america chairman and ceo ken lewis who will step down at the end of the year. we have a lineup of guests ready to sound off on this major development. we have dick bove and jeff hart, former fdic chairman bill isaac and don powell. also a b of a board member, as well. we have bob corker and congressman darrel issa of the house government reform committee ready with their comments and we're going to talk to a b of air shareholder. we're going to get the pulse of the consumer with the ceo of walgreen's. the drugstore is opening up a

new store in new york city. find out you who they are thriving in a down economy. "squawk box" is going to start about 12 minutes from now at the top of the hour. say hello to all my pals over there. >> you miss us desperately. do you miss getting up at 2:00 a.m. and all that stuff? >> yeah. >> i kind of new that answer, yeah. >> you're looking fabulous, michelle. all that sleep must be doing you good. this is christine, by the way. we miss you. >> miss you, too. >> coming up, cit presents its restructuring plan to investors today. can the u.s. lender avoid bankruptcy? we'll have the analysis. stay tuned. remember the anticipation of hearing the ice cream truck? in poland, cargill borrowed the idea...

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joining us now for a u.s. market look ahead is hugh johnson, chairman and chief investment officers at johnson ellington adviser. hugh, we have so much big news out in the u.s. today, ism

manufacturing data, construction spending, what are you looking at and how do you think the market is going to move on all of this news? >> well, these are very important numbers. i think probably of these numbers, the most important is the ism report on manufacturing generally. you want to see that the fairly current number, you want to see how the manufacturing sector of the economy is doing. but most importantly, the prices paid component, you know, everybody is a little bit worried that we're going to have higher inflation than the federal reserve or the consensus expects and the federal reserve will be forced to lean towards or raise inrates. one of the tell tale sort of leading indicators will be that prices paid number in that ism report. it will be interesting to see the aftermath of the cash for clunkers program. so the auto sales, light truck sales, they're going to go down and do down sharply. that's the real question.

all these numbers are going to add up to making some sense and being important for the markets. nothing is as important as tomorrow's employment numbers. >> speaking of which, what are you expecting to see tomorrow? do you think we'll have a jobless recovery? >> korea, i do think we're going to have a jobless recovery for at least part of the recovery. if we're in the recovery now, i don't think we're going to see any growth in jobs until we get into the late first, second quarter of next year. do you think we're going to see the unemployment rate. i think it will peak pretty close to this current level, about 9.9%. it will peak and start to come down in the first and second quarter of next year. so to that extent, it will be a jobless recovery. tomorrow's numbers, anybody's guess. it's very hard to forecast employment numbers, but i think we're going to see a loss of something in the order of 200, maybe 175,000 to 200,000 jobs. so we're losing jobs each month, but we're losing jobs at a

slower and slower pace. sooner or later, employers are not going to be able to fire anybody else and stay in business. >> hugh, this is chris tier teen here with a u.s. job market looking weak. how would you play the job markets in the u.s. and do you have a preference for emerging job markets as a result? >> yeah, i have a preference for emerging markets. that's largely related to the weakness in the dollar and everybody should have some representation or percentage of their portfolio in either developed or emerging, but probably emerging. so that is in response to that. as far as playing the u.s. markets, look, you know and i know that we've come very far, very fast, 55%, up in the s&p 500 since early march. the easy money has been made. now we're looking at stocks continue to go up, but we're going to be talking about higher inflation and interest rates. so there is going to be a drag on the rise in stock prices. i think if you have 8% rise in stock prices between now and the end of 2010, you'll be doing very well. so play it a little more

cautiously in the u.s. markets and make sure you have a good representation or percentage of the portfolio in the emerging markets. >> hugh, quick last question. what sectors do you recommend investors look at right now? >> yeah. if you play the sectors that work during a bull market, and those are including basic materials, industries, and probably above all, consumer cyclicals. take it easy there because we know the consumer is not going to come back to the extent that they did come back in other recoveries in the post war period. but consumers cyclicals and above all, i think technology is probably the best sector. technology primarily. we're going to see a pretty good increase next year in spending on equipment and software. that's going to be the strongest part on the u.s. economy. >> hugh, unfortunately we're going to have to leave it there. hugh johnson, chairman and chief investment officers of johnson & ellington. thank you so much for joining us. >> i want to briefing show you

what's taking place with regard to bae systems. they're in focus today because of reports that the serious fraud office in britain could pursue bribery charges against the company imitating lower on the back of this. i've seen their five-year cds has been widing on prosecution talks. good-bye from all of us. more than just money moving across markets. it's about exchanging ideas across cultures, opening up to the world- continuing to innovate. you need to have a nimble organization that can innovate rapidly and constantly is willing to learn. speed has become so important. every aspect of business has to be able to demonstrate flexibility and agility. collaboration is the name of the game. we have at least half a dozen relationships giving us new products, new opportunities and wonderful new therapies. a great place to be is at the intersection of content and technology

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